Learn More About the Difference Between Knoxville Owner’s Title Insurance and Lender’s Title Insurance
When purchasing a home or refinancing a property, title insurance plays a key role in protecting your investment. However, many clients are surprised to learn that there are two distinct types of title insurance. Owner’s title insurance and lender’s title insurance serve different purposes, and both can be critical to a smooth and secure real estate transaction.
At Speck Title in Knoxville, Tennessee, we help buyers, sellers, and lenders understand the importance of both policies. Here’s what you need to know about how these two types of title insurance differ.
What Is Owner’s Title Insurance?
Knoxville owner’s title insurance protects the homebuyer. Once the property purchase is complete and the title is in the buyer’s name, this policy helps guard against financial loss from problems that could arise with the title in the future. These issues might include undisclosed heirs, mistakes in public records, forgery, or unpaid liens that were not caught during the title search. With owner’s title insurance, the buyer has peace of mind that their investment is covered against hidden risks that could affect ownership rights.
Unlike other forms of insurance that require ongoing payments, owner’s title insurance is a one time purchase made at closing. It then lasts as long as the buyer or the buyer’s heirs own the property.
What Is Lender’s Title Insurance?
Knoxville lender’s title insurance, on the other hand, protects the mortgage lender. If a buyer is taking out a loan to finance the property, the lender will typically require this policy to ensure their interest in the property is protected. In the event that a title issue emerges after closing, the lender’s title insurance helps cover any financial loss the lender might face.
This policy only covers the lender’s interest, not the buyer’s. That’s why having both policies is often recommended. The lender’s policy remains in effect until the loan is paid off or refinanced.
Why You May Need Both
While lender’s title insurance is usually required as part of a mortgage agreement, owner’s title insurance is optional in many cases. Still, many real estate professionals and legal advisors recommend it because of the protection it offers the buyer. Unexpected title issues can be costly, and having owner’s coverage helps prevent major financial setbacks.
Let Speck Title Guide You Through the Process
Understanding the difference between these two types of title insurance can help you make informed decisions during your closing. At Speck Title, we work closely with our clients in Knoxville and surrounding areas to provide clarity and confidence throughout every transaction.
If you have questions or would like more information about Knoxville title insurance coverage, our experienced team is here to help.
Contact Speck Title today to learn more about how owner’s and lender’s title insurance in Knoxville can protect your real estate investment.